As a graduate of post-secondary education or grad school, you may feel the pressure of paying off your loans. In the 2022-2023 academic year alone, Canada issued $3.1 billion in student loans to eligible students. Many Canadians rely on student loans and grants to afford tuition. Read our student loan FAQs to learn more. Here are the answers to some common questions you might have about student loans in Canada:
Canadian students can apply for grants and loan funding with their province or territory. For example, Ontario students can apply for the Ontario Student Assistance Program (OSAP), while Manitoba students can apply for Manitoba Student Aid. Here is a list of each province and territory with their respective student loan links:
- New Brunswick Student Financial Services
- Yukon Student Financial Assistance
- British Columbia Student Aid
- Manitoba Student Aid
- Alberta Student Aid
- Prince Edward Island Student Financial Services
- Quebec Student Financial Aid
- Saskatchewan Student Loans
- Newfoundland and Labrador Student Aid
- Northwest Territories Student Financial Assistance
- Nova Scotia Student Assistance
- Nunavut Student Funding
- Ontario Student Assistance Program (OSAP)
Most students submit their online applications the summer before their program begins. Experts recommend you submit your application no later than 2 months before your first day of study. Applications usually take four to six weeks to process. Experts also advise applying as soon as you know you will need financial aid.
- To be eligible and apply for Canadian student loans in every province or territory except Quebec, Nunavut, and the Northwest Territories, you must be:
A Canadian citizen, permanent resident, or protected person
A permanent resident of a province or territory that participates in and issues Canada Student Loans (or Grants)
Able to prove financial need
Enrolled in at least 60% of a full course load if you’re a full-time student, or 40% if you have a permanent disability
Enrolled in 20-59% of a full course load if you’re a part-time student
Enrolled in an approved post-secondary school’s degree, diploma or certificate program. The program should run for at least 12 weeks within 15 consecutive weeks.
You will also need to maintain decent grades to continue qualifying for student loans and grants every year.
Students in the Northwest Territories, Nunavut, and Quebec have different requirements for their student loans. Please contact those individual institutions for more information about financial assistance in those areas.
From April 1, 2023, the Government of Canada eliminated interest on all Canada Student Loans. This includes loans that people are currently repaying.
If you have paid interest on student loans within the past five years, you can claim a non-refundable tax credit for interest paid. This is applicable for specific government programs, please look up details of the specific program you availed for more information. While federal loans are interest-free, provincial portions of the loan may not be. Some provinces are also planning to follow this path towards making their student loans interest-free.
Yes, you can access student loan funding from banks, credit unions, and alternative lenders. They offer flexible borrowing limits that are often higher than government loans. They often want interest-only payments during school, which means interest may start accruing immediately. However, they also tend to offer grace periods after graduation before you have to start repayment. They may also require someone to cosign your loan, or may have credit score requirements.
In contrast, Government of Canada student loans do not require you to pay any interest. If you’ve been paying interest on government student loans previously, you can claim a non-refundable tax credit for interest paid. Private student loans do not qualify for this tax credit.
Yes, you can automate your student loan payments in Canada. You can set up a Pre-Authorized Debit (PAD) directly through your National Student Loan Service Centre (NSLSC) account online. If you are receiving your student loan via direct deposit, you’re already set up for PAD automatically.
If you want to set up PAD, log into your NSLSC account. Click on “My Account” and select “Pre-Authorized Debit”. The NSLSC website has more information and support. You do not need to go through your bank.
When you set up PAD auto-payments, you will avoid missing any monthly payments and can maintain a good credit rating. Note that the Government of Canada has eliminated interest on federal student loans. This means that PAD will cover the repayment of the principal amount for these loans.
You must apply for student aid every academic year. Students’ financial situations may change each year, so a new assessment must be done to account for those changes. The maximum length of time on a single application is 12 months. If the period of study exceeds 12 months, the student will have to submit two separate applications.
Applications for upcoming academic years are made available in early summer. The loan year for student aid is typically from August 1 to July 31.
The Canada Student Grant for part-time students is available for part-time students with financial needs. When you apply for student aid with your province or territory, you’re automatically considered for this grant.
The maximum amount of financial aid you can receive with this grant is $2,520 per year, till the end of the 2024-2025 school year. For part-time students with dependents, the maximum is $2,688 per year. For students with permanent or persistent disabilities, the maximum is $2,800 per year. Some provinces offer their own grants for part-time students, like BC and Alberta. The lifetime limit for part-time Canada Student Loans is $10,000, with a maximum assistance of 340 weeks of full-time studies. Note that even if you reach the lifetime limit, you may still be eligible for Canada Student Grants for part-time studies.
For information about income thresholds, visit the Canadian government website.
- Yes, there are lifetime limits for how long you can receive student aid. The lifetime limit for student aid for students with full-time status is 340 weeks, unless:
A student is enrolled in doctoral studies, in which the limit is 400 weeks.
A student has a permanent or prolonged disability, in which the limit is 520 weeks.
Moreover, students are responsible for paying loan payments 6 months after their study period or education ends, or 6 months after they graduate. Some provincial loans may start accruing interest immediately after graduation or the end of studies. Repayment policies vary by province.
- You can create a student account with the National Student Loans Service Centre (NSLSC) to monitor your student loans. Starting May 2025, you will have to log in to your NSLSC account through a My Service Canada Account (MSCA). If you don’t already have an MSCA, it is advisable to register for one before May 2025.
The Government of Canada has eliminated interest on Canada Student Loans, including those being repaid currently. This means you will no longer see an interest rate or accruing interest on your loan’s federal portion. You can view all of your loan details on your NSLSC account, including:
Principal amount owing
Monthly payment amount
Repayment start date
Payment Method
Estimated duration of the loan repayment period
You have a few payment method options to choose from when repaying your student loans.
- Pre-Authorized Debit (PAD): Pre-authorized debit automatically withdraws money from your bank account to make your monthly student loan payments. The National Student Loans Service Centre (NSLSC) automatically signs you up for pre-authorized debit if you received your student loan amount through direct deposit to your bank account.
- Online payments: You can make online payments towards your student loan on your NSLSC account. You can also make lump-sum payments online to pay off your debt faster. Starting May 2025, you will need a My Service Canada Account (MSCA) to log in to your NSLSC account.
- Online banking: You can add NSLSC as a payee via online banking. Often, your 7-digit loan number is used as the account number.
- Telephone banking
- Monthly, post-dated cheques
- Money orders/cashier’s cheques
- Bank draft
Payment methods may vary across provinces.
- The amount of money you receive is dependent on a few factors, such as:
Tuition fees
Living situation
Income and assets
Savings and financial contributions
The weekly loan limit for full-time students has been increased to $300 for the 2024-2025 academic year. Maximum loan amounts can vary by province. For a more accurate estimate of your loan amount, use the Student Aid Estimator. Actual amounts are determined by applying through your provincial student aid office.
For a more accurate estimate of your loan amount, use the Student Financial Assistance Estimator.
Yes, there are a few pieces of legislation governing the use and provision of student loans in Canada:
- Canada Education Savings Act
- Canada Student Loans Regulations
- Canada Student Loans Act
- Canada Student Financial Assistance Act
- Canada Student Financial Assistance Regulations
These acts and regulations are subject to changes and amendments. For example, the Canada Student Loans Act was significantly amended to eliminate interest on federal student loans.
The application time ranges for each province and territory. It could take anywhere from 5 business days to 6 weeks. For federal loans, it is recommended that you apply at least two months before the start of your program.
Bankruptcy will get you out of many of your debts, but student loan debt isn’t one of them. That being said, the seven-year rule does apply. Bankruptcy only absolves you from student loan debt if you declare bankruptcy 7 years after your last day as a student.
If you declare bankruptcy and your student loans are not discharged, collections will still be paused during bankruptcy – under the Bankruptcy and Insolvency Act. Note that there is also a hardship provision in the Bankruptcy and Insolvency Act. Under this provision, a court can order student loans to be discharged after only five years in cases of extreme financial hardship.
Conclusion
Our list of student loan FAQs is not entirely exhaustive, but we try to keep it updated often! These FAQs should certainly shed some light on the questions you have about starting the process. Thousands of Canadians struggle with student loan debt, even years after they graduate. If you’re struggling to keep up with your loan payments and need assistance, consider reaching out to a credit counsellor today.
